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I was reading a global report on IT governance and management from Infonomics. The study, which canvassed the opinions of business and IT leaders in Australia, Europe, North America and other geographies, paints a rather dim view of the maturity and effectiveness of IT governance.
There’s one particular data point in the results that leaps out to me. In only 25% of the respondent organizations are business executives “seen as having a good understanding of the costs, risks, opportunities and value associated with its portfolio of IT assets.”
To me, this speaks volumes about the IT/business alignment disconnect that has bewildered CIOs since the beginning of time (or at least for as long as there have been IT or precursor “data processing” departments). IT/business alignment has been a Top 3 issue for CIOs for the past twenty years, according to studies by SIM and other organizations. Yet even the savviest CIOs I know will openly admit that they’ve been unable to crack this nut. They may make strides through various types of formal and informal steps to get in sync with their business peers. But no one has been able to solve the puzzle completely.
A big part of the problem, based on what I’ve been hearing from a growing number of IT leaders over the past few years, is a sense that they’re the ones who are doing the bulk of the heavy lifting when it comes to alignment. Granted, the IT organization is a service function that’s meant to support business initiatives. As such, IT leaders and their minions should be working hard to grasp business requirements and to translate what the IT organization can deliver in business terms that their peers can understand. To their credit, IT professionals have increased their business acumen in recent years and it’s playing out in the form of more successful project outcomes.
But how much of an effort have business leaders and line managers really made to better understand technology or the critical factors that go into the systems selection process, including the potential impact on infrastructure or security?
The Infonomics data also reflects how uninformed most business leaders are about IT costs and the IT assets that are in place. For many enterprises, IT spending represents the biggest chunk of operating expenditures. Business leaders – CFOs and CEOs in particular – often complain about how much money is spent on IT. But they need to dig deeper beneath the surface to evaluate the business value accrued from IT investments. This includes the benefits of measuring IT spend against operating expense and net revenue, says Rubin Worldwide President and CEO Howard Rubin.
IT/business alignment may ultimately be a Gordian knot for CIOs. But continued progress can only be achieved if business leaders are willing to pull their weight.
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